What’s holding up marijuana home delivery?

It will probably be summer before Massachusetts residents can start getting marijuana legally delivered to their home, warned Devin Alexander, vice president of the Massachusetts Cannabis Association for Delivery.

First, marijuana entrepreneurs must overcome a host of regulatory hurdles, including the state licensing process and potentially more difficult municipal approvals. They must navigate a market that involves retailers, who have not been entirely welcoming to delivery companies – and have threatened to sue state regulators over the new delivery rules. 

Alexander, the co-founder of Rolling Releaf, and Chris Fevry, president of the Massachusetts Cannabis Association for Delivery and co-founder of Your Green Package, joined the Codcast to talk about the nascent marijuana delivery industry, and some of the controversy surrounding the drafting of state regulations.

Under regulations that the Cannabis Control Commission will vote on Monday, delivery licenses will for the first three years be granted only to social equity applicants, who are people from communities disproportionately affected by prior enforcement of drug laws.

Alexander was arrested for marijuana possession in high school, which derailed his dreams of joining the Air Force. He got an associate degree from Quincy College, became a pharmacy technician, then started working for a Quincy medical marijuana dispensary, before forming his own delivery company. Alexander, who is black, said his goal will be to have Rolling Releaf buy primarily from minority suppliers “so when people buy delivery through Rolling Releaf, they’re going to be supporting two minority-owned businesses at the same time.”

But Alexander said one major barrier remains the host community agreement – an agreement any marijuana business must sign with the municipality where it is located. Host community agreements are allowed under state law to take 3 percent of a business’s profits, but practically there is little enforcement of that limit and many agreements require additional “donations.” Some communities cap the number of agreements they will issue. Others have moratoriums on marijuana establishments in place – so marijuana delivery companies cannot deliver there.

There’s been a lot of people who have had a head start in obtaining these host community agreements before these marijuana and delivery operators, which is really going to make it very difficult for them to get up and operational,” Alexander said. Alexander said municipalities need to be educated about the role delivery businesses play in ensuring equity in the industry, and about their differences from retailers. “We do not cause foot traffic. We do not cause abnormal vehicle traffic. We are giving people incentives to stay in their homes,” he said.

Initially, the Cannabis Control Commission wanted deliverers to be curriers, like Uber Eats – picking up marijuana that was ordered from a retailer and delivering it to a consumer. The delivery association was a strong proponent of the creation of an additional license type that would let them buy marijuana wholesale, then warehouse it and sell directly to consumers.

Fevry said the courier model is not financially viable, and relies too heavily on contracts with retailers, who have their own financial interests in getting into the delivery business once the social equity exclusivity period ends.

“I’ve had many conversations with different dispensaries,” Fevry said. “Some are very nice, and some are very much, give me 9.9 percent (ownership), I’ll help you get a (host community agreement). Or hey, we want to partner with you, but at the end of the exclusivity period, we want to buy you out.”

Fevry said the warehousing model would let him buy wholesale from cultivators then mark up the flower by 40 or 50 percent to make a profit – while maintaining access to customer data, which can be used for marketing. “At any point in time, no one can say, hey, we’re severing the partnership and your business is dead,” Fevry said. “You’re very much in control of your own destiny and making sure that your customers are happy.”

Alexander noted that the warehouse model will come with steep start-up costs – an estimated $800,000 to $1 million.

Some retailers have complained that this model will turn delivery companies into retailers, without the same overhead costs. Fevry responded that a retailer can partner with a delivery company. And while delivery companies can drive to deliver merchandise, stores have the benefit of being able to attract customers from out of state, although it remains federally illegal to transport marijuana across state lines.

 SHIRA SCHOENBERG

 

FROM COMMONWEALTH

Part 1 of 2: Black market may be marijuana legalization’s biggest challenge.

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FROM AROUND THE WEB

 

BEACON HILL

Because of crushing demand, fewer than 1 in 10 applicants for a new state fund to aid small businesses hurt by the pandemic will receive funding. (Boston Globe

Cannabis retailers are not happy about marijuana delivery regulations that are expected to be adopted today by the state Cannabis Control Commission. (Boston Herald

MUNICIPAL MATTERS  

New census data show that people moved to Massachusetts in 2019 from other New England states, New York, and California. People from Massachusetts moved to other New New England States, New York, California, and Florida. (MassLive)

HEALTH/HEALTH CARE

Dr. Anthony Fauci warns of the potential for surge after surge with the winter holidays. (NPR) Case counts at Berkshire County nursing homes start to rise. (Berkshire Eagle)

Cannabis activist Frank Shaw is working to convince marijuana dispensaries to offer 50 percent discounts to HIV/AIDS patients with financial hardship. (MassLive)

State officials continue to craft a plan for who gets priority in COVID-19 vaccine distribution. At the top of the list are health care workers who care for COVID-19 patients and nursing home residents. (MassLive)

WASHINGTON/NATIONAL/INTERNATIONAL

The US Supreme Court blocks New York’s coronavirus restrictions that limit church and synagogue attendance in hard-hit areas, arguing that the rules single out houses of worship for especially harsh treatment. (Associated Press)

The US Supreme Court will hear arguments on Monday in the Trump administration’s attempt to cut undocumented immigrants from Census, a continued effort to reverse lower court decisions that found this case and related ones unconstitutional or a violation of federal census statute. (NPR)

The IRS acknowledges its own error sent $1,200 stimulus checks to non-Americans living overseas. (NPR)

Globe columnist Adrian Walker decries the recent arrest by ICE agents of a Guatemalan national who has been in the country illegally for nearly 25 years but has no criminal record and has worked steadily while marrying and raising a family in East Boston. 

ELECTIONS

What went wrong with the polls this year? (WBUR)

Tom Keane says the best bet for fair elections, now that ranked choice voting is defeated, is “jungle primaries.” (WBUR)

A still-flailing wildly President Trump said his own Department of Justice and the FBI may have been involved in rigging the election. (Boston Herald

BUSINESS/ECONOMY

Moderna, like Pfizer, is seeking emergency use authorization from the US Food and Drug  Administration. (USA Today)

People are buying Christmas trees earlier than usual this year, as they seek some extra holiday cheer. (Eagle-Tribune)

At least 40 shellfishermen and women, mostly from Wellfleet, will benefit from a national program designed to help harvesters with income, moving product and improving recreational shellfish areas as the COVID-19 pandemic continues. (Cape Cod Times)

EDUCATION

The editorial board of The Salem News and Gloucester Daily Times argues that the state should suspend the MCAS testing requirement for graduation this year.

ARTS/CULTURE

Two South Shore entertainers are nominated for Grammy Awards this year – a first for Canton’s Bill Burr and a 10th for Stoughton’s Lori McKenna. (Patriot Ledger)

TRANSPORTATION

A new Boston survey finds that far more people are planning to drive alone to work post-pandemic. Many are also hoping to increase the amount of remote work they do. (MassLive)

Massachusetts now considers every state other than Hawaii high-risk for travel, meaning anyone entering Massachusetts from another state must quarantine or test for COVID-19. (MassLive)

CRIMINAL JUSTICE/COURTS

Gov. Charlie Baker, who appears to be the first governor since John Hancock to appoint all seven members of the Supreme Judicial Court, is remaking the state’s highest court in his own image — as a cautious, incrementalist panel that seeks practical solutions, say experts. (Boston Globe)

Suffolk County DA Rachael Rollins said she may still weigh in on the Sean Ellis case that is now featured in an 8-part Netflix documentary. (Boston Herald) Rollins blasted judges who are looking to overrule her office’s decisions in cases where they don’t have that authority. (Boston Herald)

The Telegram & Gazette finds that central Massachusetts police departments are following state rules about wearing masks – even though police in other states have been exempt or have refused to follow mask rules.  

MEDIA

The Telegram & Gazette is losing three of its most experienced reporters. Sports reporter Bill Doyle is taking a buyout after working for the newspaper for more than 40 years. Nick Kotsopoulos is retiring after 43 years, almost all of that time spent covering Worcester City Hall. And reporter and columnist George Barnes will retire after more than 40 years in journalism, 23 of them at the Telegram & Gazette. (Telegram & Gazette)